In what reads more like a movie script than a factual presentation of a legal case, the US government filed a 90 page criminal indictment against 2 companies and 7 individuals for copyright infringement. Then they pressured the New Zealand government to send in armed forces including a helicopter to arrest a Dutch citizen (among others) for running an internet service.

What should worry many is these were criminal charges not for any direct behavior, but for indirect behavior - the equivalent of jailing the photocopy company for what users copied using the equipment they provided. Most distressingly, these defendants were denied due process. Before they could defend themselves in court the company was shut down, all assets of the company seized (annihilating the company), the parties were arrested and all their assets frozen. If you care about the rule of law and citizens being protected against unilateral actions by the government, then the Megaupload should cause grave concern.

While the government paints the operation of the service as nefarious - it's strikingly similar to Google's own YouTube (which media companies sued and to date have not prevailed), Microsoft's Skydrive, Dropbox and hundreds of others where users upload material for their own or others use. An interesting exercise is to search and replace "Megaupload" with "YouTube" in the indictment.

Here's a paragraph where I've taken that liberty:

Any Internet user who goes to the YouTube website can upload a computer file. Once that user has selected a file on their computer and clicks the "upload" button, YouTube reproduces the file on at least one computer server it controls and provides the uploading user with a unique Uniform Resource Locator ("URL") link that allows anyone with the link to download the file. For example, a link distributed on December 3, 2006 by defendant DOTCOM (YouTube.com/?d=BYl 5XE3V) links to a musical recording by U.S. recording artist "50 Cent." A single click on the link accesses a YouTube.com download page that allows any Internet user to download a copy of the file from a computer server that is controlled by the YouTube.

Of course the link above won't work, but the rest of the passage is an accurate description of how YouTube operates (although YouTube streams instead of downloads but there's no distinction for those terms in copyright law).

I was recently on a panel where several people who worked in the media industry cited the fact that Megaupload paid people who uploaded popular material as the distinction between Megaupload and YouTube. I pointed out to them that YouTube does the same. When users upload videos to YouTube, if they become popular, then YouTube often offers to pay them a portion of the advertising money - exactly as Megaupload does. You can read about YouTube's Partner program here. As the differences between the two services were whittled away they grew silent, unable to defend the government's actions.

Megaupload is also accused of racketeering, money laundering and wire fraud which sounds like mob activity, yet it appears they were transacting a business just as any corporation would - collecting money from customers and advertisers, paying business expenses including technology costs, and remunerating employees. Like any modern business, they moved the money electronically which is where the "wire fraud" allegations come into play. Yet if they had moved the money in grocery sacks the government would have used that against them. I see no evidence that they were hiding money or disguising its payment.

Throughout the indictment, facts that are irrelevant are presented to look damning. Megaupload didn't have a search engine or a list of popular movies from studios on their service. Rather than commending them, they twist that to say that they're hiding their activities. For sure if Megaupload would have provided a search engine or list that would have been used against them. So Megaupload is damned if they do and damned if they don't. Allegations are that the employees of Megaupload used Megaupload - which one would naturally expect. It would be shocking if management of any company didn't use their own product to test performance, quality assurance, and often to fill a need in their own life. One simple but telling example is that instead of referring to the company by its name "Megaupload" they replaced it with "Mega Conspiracy" and used this term literally hundreds of times. The individuals listed all became "Mega Conspirators". Repeating terms is an effective strategy in brainwashing because the repetition eventually takes root.

The press has focused on the flamboyant Kim Dotcom with his sketchy past, but the indictment goes beyond him. Kim is a rotund individual with ample photographic evidence that he lives large and likes to party. No denying he is not a sympathetic defendant, but his personal lifestyle should be irrelevant to the legal analysis. Six other people are also targeted reaching all the way down to a graphic artist in the company. Those who works at a technology company should be taking a gulp right now because if they can imprison a graphic artist, then anyone who is employed in a tech company that runs afoul of the media companies could have the same happen to them.

I do not know all the facts of the case - only what the government has alleged - so it's premature to pass judgement on Megaupload's legality, but there is plenty of evidence to pass judgement on the Obama administration which trashed any notion of 'innocent until proven guilty'. Kim Dotcom would have received better treatment if he had been accused of being a serial murderer. The governments actions were influenced and directed by corporations, using the armed forces of the US as their henchmen to halt technology they don't like. Our judicial system gives everyone the chance to present facts in their defense. That did not happen in this case and Americans should be outraged. The Electronic Frontier Foundation has spoken out against the government's behavior and I encourage you to support them in their efforts. Watch this interview with Kim Dotcom to hear his side of the story.

-- MR

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